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  • Halcon Resources: Will The Tuscaloosa Marine Shale Be The Final Nail In The Coffin? [View article]
    I take a far more simple approach to HK. Look at what Floyd Wilson did at Petrohawk. The company was maligned, downgraded and kicked to the curb for a series of failures but kept searching for the next big thing and wound up being very early to the Eagle Ford. That poor, badly managed company sold to BHP Billiton for $15 Billion and its management and shareholders laughed all the way to the bank. HK's story reminds me exactly of Petrohawk's - stumbles here and there, general disrespect for the company and its management, significant declines, then left in the scrap heap...
    Of course, it remains to be seen if HK can "pull a Petrohawk" and finally find a way to be in the right place at the right time. The way new plays are being developed and new technology is making previously forgotten areas into hot ones, there seems to be a lot of opportunity for the HKs of the world that swing for the fences and have the resources to do it more than a few times.
    I like HK at $3.50. It may go lower, of course, but probably not much, and it may go higher, of course, and when it does, probably by a lot. That's a reasonable risk/reward scenario for any stock, but especially one with a management team that's been down this road before.
    Mar 21 01:51 PM | 10 Likes Like |Link to Comment
  • Apple: It's Panic Time [View article]
    On a micro level, where some of the best data is found: my 21 year-old daughter, a former sorority president and center of her social circle, just traded in her Android for an iPhone last week. It was her birthday and we told her she could get any phone she wanted and all she could talk about was finally getting an iPhone: "It's so much cooler than my HTC - it fits in my hand, the apps are ridiculous, and all my friends have them - now I can be in their message group!". She went to Best Buy to get it and they furiously attempted to convince her to buy the new Samsung, "Look at this screen", "Can you believe how big this screen is?", "Have you seen this screen?". My daughter said that it was as if the whole mobile phone section at BB worked for Samsung. She stuck to her guns, got her iPhone, and before the end of the day got a group message for a party that night and had downloaded an Apple app she'd always wanted, plus was able to sync it with her Mac.

    Oh yeah, you know she's a Mac user - like every kid at her college, by the time she was a sophomore she was left out of all the new software, apps and other cool stuff because she was one of the few kids who didn't have a Mac notebook. Needless to say dumped her Dell for a Mac, emptying her bank account for it, and has never looked back. Her 25 year-old brother did the same thing when he was in school - used his own money to trade in the Sony we gave him for graduation and upgraded to the Mac. I don't know about the rest of the world, but on most college campuses and for anyone under 35, you either go Apple or go home.
    Part 2 of my micro-level story: I got one of the first Samsung S3s and it was the worst phone I've ever had. It had lots of bells and whistles and I sure loved that big screen, but I've never had a worse phone for getting and keeping a signal. Standing side-by-side with any other phone user using the same cell service, they'd have four bars and I'd have 2, or they'd have 2 and I'd have no signal. Everyone I called complained I sounded like I was in a tunnel or underwater. After three trips to Best Buy and one complete replacement to no benefit, their "no lemons" warranty policy kicked in and I picked out a new HTC, which I have loved ever since.
    I'm long Apple, having dived in around $560. Hurts right now but I believe in this company and its almost creepy way of insinuating itself into the lives of its users. It's like tech crack, once you're into Apple you'll never get out, and it's viral - from the iPhone to the Mac to iTunes to the iPad.
    The virus may be sleeping for now, but like all real viruses it only takes a fresh outbreak to infect another large portion of the population. In the meantime, it's still in people's blood, and they're still adding to their Apple collection of devices. This is just a brief period of dormancy. As noted in comments above, this has happed 3-4 times in the past whenever Apple was in a brief inter-release lull, and each time it led to much rending of garments and gnashing of teeth. It may not be Apple TV this time but it'll be something. Few saw the iPad coming either.
    Jul 1 01:15 PM | 4 Likes Like |Link to Comment
  • Among energy firms, a disconnect between Q2 results and stock movement [View news story]
    To expand on mjtroll's comments: NFX and XCO are not oilfield service and equipment companies. Both are pure E&P (exploration and production) companies. They are in the same general Energy sector of course, but their sub-industries are completely different. The distinction may be academic for investors and traders as the XOP and OIH are inextricably linked and rarely move independently. However, relative valuations do tend to follow more closely the sub-industry than the sector, just as they follow an independent company more closely than its sub-industry.
    Jul 30 03:42 PM | 2 Likes Like |Link to Comment
  • Quiet Period Expiration For Parsley Energy Offers New Buying Opportunity [View article]
    As a 30+ year participant in the financial and operational sides of E&P, I've spent many hours observing and analyzing the difference between the generations. Houston is filled with multi-generational oil and gas guys, and I think I can count on one hand the number of sons or grandsons that have made good over a prolonged period of time. Certainly there are the Jeff Sandefers that got a boost from dad, made a quick pop and got out with some serious cash, but there are so many others I won't name that got the same boost, enjoyed the ride for awhile, but then found out that it was a lot of hard work for a really long time and just couldn't handle it.

    Having said that, I love PE's business plan. Vertical and now horizontal wells into multiple stacked pays in one of the hottest basins in the world - nice! I was all set to dive in until I saw who was running it - and I don't know the young man at all - but a 3rd generation silver-spooner has me on the sidelines. This is patently unfair of me, just as it may be equally unfair to assume that his family DOES give him an edge. We should all be given every opportunity to prove that we're our own man and capable of making it on our own.

    And then I read that he started with 100 wells he got from Grampa. After working as an operations tech for Dad. Just exactly how well would he have done in the world if he hadn't had their help, and how much can they help him now? Guess we'll all find out.
    Jun 6 06:01 PM | 2 Likes Like |Link to Comment
  • Southern Copper (SCCO) is considering closing its foundry and refinery in southern Peru because it doesn't think it can comply with limits on sulfur dioxide emissions that will take effect next year, an internal document says. It's unclear how such a closure would affect SCCO's annual copper output, estimated at 650K metric tons this year. [View news story]
    I take this as nothing more then SCCO letting the Peruvian government know that harsher regulations will hurt business. It's clear from the press release that they've been arguing this with the regulators for some time now and this is the next logical step in the negotiations. Releasing the information via a memo to the staff is a time-honored way to let the world know what could happen if the regulations aren't loosened or delayed.
    Jul 5 06:00 PM | 2 Likes Like |Link to Comment
  • Going All-In On SandRidge Energy [View article]
    I've weighed in on SD before. I know the company, the assets, the history and the man. I never touched this stock and I never will.
    Jan 8 06:36 PM | 2 Likes Like |Link to Comment
  • Panic-selling in income producers (I, II) infected the BDC's as well, notably Main Street (MAIN) and Triangle (TCAP), both down more than 10%. Fed meddling seemingly can't hurt their returns, but most names in the popular sector trade well above their net asset values (MAIN is 57% above Sept. 30 NAV after today's decline, TCAP 47%), making them vulnerable to a change in sentiment even if business is doing fine. [View news story]
    Nothing but doom and gloom, but not just because Obama won. We all knew that that was reasonably likely, or at least anyone who could read the news with an impartial eye could. All of the last week's value destruction can't be just the result of us finding out that the polls were right, so what is it?

    Consensus is building that it's a combination of three significant factors: 1) Germany's weakening economy threatens all of Europe's solvency, 2) the election confirms that we'll spend the next four years minmizing our chances of economic recovery from this most-anti business administration, and 3) less than thrilling earnings reports. Germany and the earnings take out tech, earnings and the negative tax implications disrupt MLPs and REITs.

    There will be pops when there is consensus on how to raise taxes ("if" was decided November 6th), and particularly if there's any agreement on managing entitlements. Increasing the federal debt limit and pushing back the fiscal cliff will help stabilize people's attitudes, but will it be enough? None of that will make Germany any stronger or improve next quarter's earnings reports, but at least settling one of the three factors should give us a fighting chance.

    Until those things come to pass and the impact on the markets is clear, I agree with tampat - stay away for now, let this baby settle. It could be another 2-3 months of steady declines.
    Nov 14 06:34 PM | 2 Likes Like |Link to Comment
  • EXCO Resources: What Just Happened? [View article]
    Man I love it when good information comes out fast, and this is really good, really fast. Thanks!!
    Oct 2 03:47 PM | 1 Like Like |Link to Comment
  • Memorial Resource Development IPO Expiration Provides Hot Buying Opportunity [View article]
    Don - I appreciate you letting us know when these new issues arrive and when the quiet period is set to expire. That can be a solid lead to a great buying opportunity on a conceptual level.

    I recognize this article as being very similar to the one you published a few weeks ago about Parsley Energy (PE). Same concept, same recommendation, same type of company. But that never worked for PE as the underwriters came out with either Hold or Outperform ratings and the stock tumbled 7-8%. Considering that they had every reason to promote that stock, a Hold rating was quite damning, and chased me off the stock for good.

    That probably won't happen here. I agree that MRD has a great chance at being a success. Unlike PE, its management, backers and associated companies are all proven winners.
    Jun 26 06:07 PM | 1 Like Like |Link to Comment
  • Mortgage REITs eye sliding interest rates [View news story]
    I think I've about had it with the mREITS. We got killed last year because everyone was afraid interest rates would go up with the tapering. Now we're getting hammered because interest rates are going DOWN. Screw this - I'm buying more blue chip dividend payers and sticking my head in the sand.
    May 28 05:12 PM | 1 Like Like |Link to Comment
  • Danger Zone: Workday [View article]
    I smell disaster on all these high-tech momentum stocks that are built on concepts and not fundamentals. You don't have to be very old to remember what happened in 2000. Once the market loses its enthusiasm for any sector then basic fundamental financial analysis becomes the only thing that its stock prices are based on. That is a scary thought with these high-concept/no profit darlings.

    I'm out.
    Apr 16 02:20 PM | 1 Like Like |Link to Comment
  • Memorial Production Partners: 9.9% Yield, Good But Expensive [View article]
    Depends on what you consider "long term". As a 35-year employee of the oil patch and a somewhat knowledgeable investor, I spotted MEMP a mile away when NGP announced its plans. I have always had tremendous respect for the management of both companies, and so I jumped on MEMP when it opened almost two years ago. I don't reinvest dividends because I hate the randomness, but I do buy on dips and have built MEMP up to almost 10% of my portfolio. So, for almost two years now I've been raking in the +/- 10% distribution and am up over 20% on stock appreciation. That feels like long-term to me.

    I don't keep a lot of stocks for two years but this one's been special. To be able to make money on gassy assets in this market takes that "laser focus" and they've proved themselves again and again. On top of their ability to make money in this $3.70/MCF world, just imagine the potential if gas ever gets back to the $5-6 that many feel is inevitable.

    There's a lot to like here.
    Sep 21 05:49 PM | 1 Like Like |Link to Comment
  • Evaluating Southern Copper's Intrinsic Value [View article]
    Excellent analysis - I'm a Follower from now on.

    Can anyone explain the highly erratic dividends on SCCO? I haven't been following it long enough to figure this out, but the $2.75 paid in November really distorts my calculations.

    Anybody know what's going on there?
    May 20 12:42 PM | 1 Like Like |Link to Comment
  • QR Energy: Risky But Worth It [View article]
    Actually, G&A means quite a bit more than miscellaneous. From Investopedia: "General and administrative expenses encompass a variety of expenses associated with performing the daily operations in a company. In the company's income statement, these expenses with generally appear under operating expenses. Legal expenses, other professional expenses and executive salaries may also be included."

    And Dr. Jan, with all due respect, G&A is so common in financial circles that it rarely needs explaining. In those cases where I stumble across an acronym that I don't know, I just look it up.
    Dec 13 03:30 PM | 1 Like Like |Link to Comment
  • QR Energy: Risky But Worth It [View article]
    QRE is one of my largest holdings, in a taxable account, initiated at a variety of prices around $20/share. I'm getting killed. And now this, the change in rules that will allow significantly higher G&A: that's a 500% increase, which is pretty huge. Does anyone know why they've done this, what the money is to be used for? Were we all victims of a bait and switch from their original promise to hold G&A to 3.5% of EBITDA?
    Dec 11 07:01 PM | 1 Like Like |Link to Comment